Aircraft Order with Airbus

RNS Number : 8154Y

easyJet PLC

31 December 2010

 



4 January 2011

easyJet plc places aircraft order with Airbus

·      15 existing A320 aircraft options converted to firm orders

·      20 A319 contracted aircraft deliveries converted to A320 deliveries

·      Options secured over a further 33 A320 aircraft bringing the total number of options held by easyJet to 42 aircraft

·      This agreement will enable easyJet to continue to execute its strategy of carefully targeted growth with margin improvement

easyJet plc ("easyJet") today announced that it has reached agreement with Airbus to exercise existing options over 15 Airbus A320 aircraft for delivery between 2012 and 2014 and to secure new options over a further 33 A320 aircraft.  In addition, 20 of the A319 aircraft which easyJet had contracted to acquire from Airbus have been converted into orders for A320 aircraft. 

Today's announcement will ensure that easyJet is able to continue to execute its strategy of carefully targeted growth and take advantage of opportunities for profitable market share gain. easyJet benefits from flexibility in its fleet planning arrangements and through a combination of the new aircraft order, deferrals and lease extensions means that its growth rate in terms of seats flown can be flexible and dependant on the opportunities available and economic conditions.

easyJet's fleet plan as at 31 December 2010 was:

	Owned	Operating leases	Finance leases	Total	Future committed deliveries1	Unexercised purchase options and rights2
easyJet A320 family	111	63	8	182	60	73
Boeing 737-700	-	8	-	8	-	-
GB Airways A320 family		3	-	3	2	-
	111	74	8	193	62	73

Note 1: The 60 future easyJet deliveries and 2 ex-GB Airways deliveries are anticipated to be delivered over the next four financial years, 25 in 2011, 20  in 2012, 12 in 2013 and 5 in 2014

Note 2: Purchase options and rights may be taken on any A320 family aircraft and are valid until 2015

The total fleet plan over the period to 30 September 2013 is as follows:

	easyJet A319	easyJet A320	Boeing 737-700	GB Airways A320 family	Total aircraft
At 30 September 2010	159	23	8	6	196
At 30 September 2011	167	35	2	-	204
At 30 September 2012	168	45	-	-	213
At 30 September 2013	163	55	-	2	220

The terms for the acquisition of the aircraft including certain purchase incentives and credits made available and the terms of payment, reflect the advantaged terms that easyJet has secured in its ongoing relationship with Airbus which are substantially the same as those for the purchase of the first 227 aircraft under the Airbus Contract, which were described in the circulars to shareholders dated 24 February 2003 and 28 November 2006 respectively (the Circulars). Full details of these circulars are available at http://corporate.easyjet.com/investors/shareholder-services/shareholder-circulars.aspx and Appendix A to this announcement sets out details of easyJet's transactions with Airbus since 2002.  The order is part of the existing contract with Airbus. Meanwhile easyJet continues to maintain an open and productive dialogue with Boeing on the development of current and future programmes.

Under the Airbus Contract the aircraft basic price of each A320 aircraft, as at December 2010, was approximately US$73 million and therefore whilst the total list price for the 15 new A320 aircraft should be approximately US$1.1 billion, under the Airbus Contract easyJet has been granted substantial confidential price concessions by Airbus and the selected engine manufacturer - all prices above are subject to price escalation which reflects inflation. The conversion of the 20 A319 aircraft into A320 aircraft will increase the amount payable by easyJet for those aircraft, however the aggregate amount payable for an A320 aircraft is still substantially below the basic price for the A319 aircraft as described in the Circulars. There is no change in the other terms applicable to these aircraft.

The additional 33 options over A320 aircraft have been granted on the same terms as previously contracted and easyJet has paid a small percentage of the purchase price payable for the underlying aircraft which gives easyJet a price discount on each option on terms consistent with the concessions granted on the firm orders. If easyJet choose to take advantage of the additional 33 options the price payable for such aircraft and the other terms applicable to such acquisition will be the same as those for the purchase of the other aircraft under the Airbus Contract and the amount paid for the grant of each option is deducted from the purchase price on exercise.  easyJet has the right to exercise the additional 33 options up to March 2013.

The additional aircraft will be financed through a combination of cash, operating leases and debt. 

Carolyn McCall easyJet Chief Executive said.

"We are pleased to announce this agreement with Airbus. It will help deliver easyJet's strategy of continued profitable growth towards our target of 12% ROCE through the cycle, whilst providing even more flight capacity for our passengers.  A central feature of the agreement is the flexibility it gives easyJet to vary the growth rate in its capacity to reflect economic conditions and market opportunities."

Ends

Enquiries should be directed to:

easyJet plc

Investor:

Rachel Kentleton, Investor Relations                                            [phone]

Media:

Paul Moore,  Communications                                                    [phone]

Appendix A -   Aircraft orders

Date	Action	Firm orders	Options	Purchase rights	Total
30 Dec 2002	Purchase Agreement for 120 Firm Purchase Aircraft plus 120 Purchase Rights	120	-	120	240
21 Dec 2005	Conversion of 20 Purchase Rights into Firm Purchase Aircraft	140	-	100	240
13 Nov 2006	Conversion of 52 Purchase Rights into Firm Purchase Aircraft plus an additional 75 Purchase Rights	192	-	123	315
June 2007	Conversion of 35 Purchase Rights into Firm Purchase Aircraft plus conversion of 24 Purchase Rights into Options	227	24	64	315
December 2010	15 Firm Purchase Aircraft plus conversion of 33 additional Purchase Right Aircraft to Options giving a total of 42 Options held	242	42	31	315

 

END

 

 

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